[ad_1]
Target (TGT) aims to achieve even more goals in 2024 after a series of challenges last year.
“We look at growth roadmaps to get our targets back to growth companies from a comparable sales perspective, a traffic perspective, and [market] Share position,” Target Chairman and CEO Brian Cornell told Yahoo Finance ahead of a high-profile investor day in New York City on Tuesday.
In 2024, Target plans to open new stores, renovate existing stores, introduce private label brands and announce a membership program with faster delivery times and other benefits, Cornell said.
The company reported fourth-quarter sales, gross margin and earnings per share increased year-over-year, with all three metrics exceeding analyst expectations. However, same-store sales have been declining year by year.
Target’s stock price rose 12% after the earnings announcement.
“We believe that F4Q results and guidance were better than feared. Guidance anticipates continued improvement through F4Q to F4Q, including for low-income households. “This is broadly consistent with our expectations that intentions are improving,” said Stifel analyst Mark Astrachan. Note to client.
The promise of growth comes after a tough 2023 for discounters.
The company struggled with declining food and discretionary sales and declining market share, falling behind even rivals Walmart (WMT) and dollar stores. That’s partly due to stubbornly high inflation and a perception that Target is more expensive than its competitors.
General merchandise categories such as apparel and home goods, which are important sales drivers for Target, have been under pressure throughout the year, and shoppers have become more cautious as a result.
However, Target was able to maintain its profit margins by cutting $500 million in expenses as part of a $2 billion cost-cutting plan.
Target stock has fallen 4.4% in 2023, lagging the S&P 500’s 24% rise. Walmart stock rose 12.3% and Costco (COST) rose 42.5%.
Target is reinforcing its value message to consumers this year, in part by introducing private labels, Cornell said.
Here’s how Target’s earnings stack up:
Revenue summary
-
Net sales: +1.7% YoY to $31.9 billion, expected $31.38 billion
-
Gross profit margin: 25.6% vs. 22.7% a year ago vs. estimated 25%
-
Diluted EPS: +57.6% YoY to $2.98, forecast $2.40 (guidance: $1.90 to $2.60)
-
comparative sales: -4.4% YoY (up 0.7% last year):
What else caught our attention?
-
Inventory decreased by 12% compared to the previous year.
-
The company did not repurchase its own shares again this quarter, even though it had $9.7 billion remaining in prior repurchase authorizations. Cornell told Yahoo Finance that the company could begin buying back its own shares again in the second half of this year.
-
Both the number of transactions and average check size decreased this quarter.
-
Target ended the year with about $4 billion in cash.
-
Earnings per share for the first quarter are expected to be $1.70 to $2.10, compared with expectations of $2.09.
-
Full-year earnings per share are expected to be between $8.60 and $9.60, compared with expectations of $9.15.
Brian Sozzi I’m the executive editor of Yahoo Finance. Follow Sozzi on Twitter/X @BrianSozzi And even more linkedin. Have a tip about a deal, merger, activist situation, or more? Email brian.sozzi@yahoofinance.com.
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
[ad_2]
Source link
